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Brand-new or pre-owned - Your car decides the insurance you should get

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Published on March 9, 2021. EST READ TIME: 3 MIN

Here’s a story that shows why you need to understand the difference between getting insurance for a new car and a used car. Ajay and Vijay are twins. They just don’t share their birthday, but also have common ambitions. Recently, they decided to buy cars. While Ajay bought a brand-new hatchback, Vijay almost paid the same amount to buy a pre-owned SUV.

Now, they know that though it is mandatory to have third-party car insurance, it’s advisable to get a  comprehensive car insurance policy as it covers damages to their own vehicles as well. However, the procedure to get one for a new car is different from getting used car insurance. So, they are confused. Let’s help the brothers by explaining what they need to do now.

1. Steps to buy car insurance for a new vehicle 

The list of things to do is fairly easy for Ajay. Gone are the days when one had to visit the office of an insurer, stand in the queue, and fill out various forms to get the policy. Now, all of that and more can be done with a few clicks. The facility of buying or renewing car insurance online has made the life of car owners easier. So, here’s what Ajay has to do:  

• Step 1- He needs to visit the website of the insurer and navigate to the car insurance column. There, he needs to fill in details like the car’s make, model, variant, registration date, the city it will be driven in, and contact details. He will then receive a few options for the policy.

• Step 2- The premium differs on the basis of many things like policy type chosen (third-party liability only or comprehensive insurance), list of add-on covers opted for (zero depreciation cover, return to invoice cover, engine protect cover etc.), and the size of Insured Declared Value (IDV).

• Step 3- Once Ajay zeroes in on the policy that suits his budget and needs, he will be guided to the terms and conditions page, which will also show the list of inclusions and exclusions.

• Step 4- The last step is to make the payment and voila! Ajay will get the policy in his mail, while a hardcopy will be delivered to his address.

2. Steps to buy car insurance for a pre-owned vehicle

• Step 1- The person who sold his SUV to Vijay would have had an insurance policy. Along with the ownership of the car, Vijay needs to get the insurance policy transferred to his name as well. Once he does that, he won’t have to renew the policy till its period expires.

• Step 2- Some of the documents that Vijay will need for the transfer of insurance policy are his original Registration Certificate (RC), certificate of insurance, a copy of the car policy, the transfer fee and transfer of RC, duly filled Forms 29 and 30 bearing the sign of the previous owner, new proposal form, NOC from the previous policyholder, etc.

• Step 3- After the paperwork is done (i.e. both the RC and the insurance document should have Vijay’s name) and the fee is paid, the insurer will transfer the car insurance to the new owner’s name. Vijay will have to pay any No Claim Bonus (NCB) difference as the NCB is attached to the owner and not the car.

If Vijay’s second-hand vehicle does not come with car insurance, he must pick one on his own. For that, he would have to follow the same steps as Ajay.

Conclusion

Car insurance is a must not just because the law mandates it, but also because it can save you from major financial losses if your car suffers damages. One must do thorough research and compare deals to get an offer with the best coverage and lowest premium.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales. 

This blog has been written by

S. Gopalakrishnan | Motor Insurance Expert | 40+ years of experience in insurance industry

A veteran in insurance industry. S. Gopalakrishnan is a name to reckon with in the field of reinsurance, he has headed the Reinsurance department and has rich experience in other fields of motor insurance. He loves to share his opinion on latest topics in the insurance industry and how he can help people in safeguarding their assets using insurance products.

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Few Other Articles:

• Is it essential to opt for Hydrostatic Lock Cover when buying or renewing your car insurance?

• Mistakes to Avoid when Buying Car Insurance Online

• Concept of IDV in Car Insurance

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